Marketing Management

Marketing Management

Omar Shawky

*

Marketing is a Social & Managerial PROCESS by which individuals & groups obtain what they need & want through : Creating, Offering & exchanging products of value to others

Marketing is

Marketing Concepts

Satisfying Needs Profitably

Value-Delivery Process

Product Design Procure Make Price Sell Advertise

Promote Distribute Service

Make the Product Sell the Product

Customer Segmentation

Market Selection/ Focus Targeting

Value Positioning

Product Development

Service Development

Sourcing

Making

PricingDistributing

Serving

Sales Force

Sales Promotion Advertising

Choose the Value Provide the Value Communicate the Value

(a) Traditional Physical Process Sequence

(b) Value Creation and Delivery Sequence

Strategic Marketing Tactical Marketing

Marketing Plan Process

Marketing Research

Segmenting Positioning Targeting

Defining Target Market Needs, Wants, Demand

Product

Variety Quality Design Features Brand Packaging Size Services Warranty Return

Price

Price List Discounts Allowances Payments Credit

Promotion Promotions Advertising Sales Force Public relation

Direct marketing

Place

Channels Coverage Assortment Location Inventory Transport

Marketing Mix 4 Ps

Segmentation

A process of subdividing the market into distinct subsets of customers that behave in the same way or have similar need.

Mass production – Mass distribution – Mass promotion of one product for all buyersMass Marketing

Consists of a large identifiable group who share same need or behavior

Segment Marketing

Levels of Market Segmentation

Dividing segments into subsegments or by defining a group with a distinctive set of traitsNiche Marketing

Marketing programs being tailored to the needs & wants of local customer groupsLocal Marketing

One to one marketing – providing custom made products The ultimate level of segmentation

Individual Marketing

An effort to increase targeting precision it can be carried at four levels

Segmentation

Bases for Segmenting Consumer Markets

These segmentation variables can be used singly or in combination

Geographic

Calls for dividing the market into different geographical units such as states, regions,counties & neighborhood

• Region • City or Metro size • Density • Climate

Demographic

• Age • Family Size • Family lifecycle • Gender • Income • Education • Occupation • Religion • Race • Generation • Social Class • Nationality

Psychographic

• Lifestyle • Personality

Behavioral

• Occasions • Benefits (Unique selling proposition) Crest • User status • Usage Rate • Loyalty Status: - high-core loyals –Split loyals – Shifting loyals - switchers • Buyer-readiness stage • Attitude toward product

Segmentation

D- Requirements for Effective Segmentation

To be useful market segments must be :

Size, purchasing power, & characteristics of the segments can be measuredMeasurable

Segments are large & profitable enough to serveSubstantial

Segments can be effectively reached & servedAccessible

Distinguishable & respond differently to different Marketing mix elements & programs

Differentiable

Programs can be formulated for serving the the segmentsActionable

Segmentation

Marketers don’t create a segment; they identify segments and then focus on which one to target

Targeting

The act of evaluating and comparing the identified groups and then selecting one or more of them as the prospects

Selecting the Market Segments

Targeting

M1 M2 M3

P1

P2

P3

Single segment Concentration

The company selects a single segment, it gains a strong knowledge of the segments needs & wants& achieves a string market position in the segment

M1 M2 M3

P1

P2

P3

Selective Specialization

The company selects a number of segments all fits objectives & resources. & all promises to be money makers

M1 M2 M3

P1

P2

P3

Product Specialization

The company concentrates on a certain product that it sells to several segments. It builds a strong reputation in the specific product area

M1 M2 M3

P1

P2

P3

Market Specialization

The company concentrates on serving many needs of a particular customer group. It builds a strong reputation in serving this customer group

M1 M2 M3

P1

P2

P3

Full Market Coverage

The company serves all customer groups with all the products they might need. Only very large firms can undertake a full market coverage strategy

Differentiation & Positioning

Differentiation & Positioning

Product

• Features Characteristics that supplement the product’s basic function • Performance Quality The level at which the product’s primary characteristics operates • Conformance Quality Degree to which produced units are identical & meet promised specs (Perceived quality is more imp. than technical quality) • Durability The product operating lifecycle under natural & stressful conditions • Reliability The measure of the probability that a product will not malfunction or fail within a specified period of time • Style The product’s looks & feel to the customer • Design • Reparability

Service• Ordering Ease

• Delivery Speed, accuracy &care attending

• Installation Work done to make a product operates in its planned location

• Customer training Training customer employees

• Customer Consulting Data information & advising services

• Maintenance & repair Helping customers to have the product in a good working order

• Miscellaneous Services

Tools for competitive Differentiation

McDonald’s

Mercedes

Cisco

Pizza Hut

Metro

McDonald’s

Tools for competitive Differentiation

Personnel

• Competence Required skill & knowledge

• Courtesy Friendly respectable & considerate

• Credibility Trustworthy

• Reliability The employees perform the service consistently & accurately

• Responsiveness Respond quickly to request & problems

• Communication Make an effort to understand customers & communicate clearly

Channel

• Coverage

• Expertise

• Performance

Image• Identity Vs Image Identity is the ways that the company aims to identify itself or position its product. Image is how the public perceives the company or its products

• Symbols Triggers company or brand recognition (Brand Logos)

• Written & audiovisual Media Convey a storyline or mood or a performance level

• Atmosphere Physical space in which the company produces or delivers its products

• Events The company could build an identity through the type of event it sponsors

Differentiation & Positioning

Marlboro

Apple

Malaysia

Morgan Stanley

Vodafone

Chipsy

Marketing Plan Process

Marketing Research

Segmenting Positioning Targeting

Defining Target Market Needs, Wants, Demand

Product

Variety Quality Design Features Brand Packaging Size Services Warranty Return

Price

Price List Discounts Allowances Payments Credit

Promotion Promotions Advertising Sales Force Public relation

Direct marketing

Place

Channels Coverage Assortment Location Inventory Transport

Marketing Mix 4 Ps

Marketing Mix

4 Ps 4 Cs • Product Customer Solution • Price Customer Cost • Place Convenience • Promotion Communication

New Product Development Process “How to launch a new product ?”

Product

1- Idea Generation

5- Business Analysis

6- Product Development

7- Market Testing

8- Commercialization

2- Idea Screening

3- Concept Development & Testing

4- Marketing Strategy Development

New Product Development Process “How to launch a new product ?”

Product Life Cycle

GrowthDeclineMaturity

Introduction

Profits

Sales

Product Life Cycle

PLC

Introduction Growth Maturity Decline

Time

Sale

s

Product Offer a basic product

Diversify brands & models

Phase out Weak items

Price Cost plus Penetrating price

Matching best Competitor’s

Cut price

Place Selective Distribution

Intensive Distribution

More intensive Distribution`

Phase out unprofitable outlets

Advertising Build awareness- Early adopters

Brand differences & benefits

Reduce

Sales Promotion Heavy Reduce to take adv

of heavy demandIncrease to encourage

Reduce to Minimal level

Offer extensions & services

Build awareness- Mass market

PLC

Introduction Growth Maturity Decline

Time

Sale

s

Sales Low Rising Peak declining

Costs/ Consumer High Average Low Low

1-Characteristics &

Objectives

Profits Negative Rising High declining

Customer Innovators Early adopters

Middle Majority

Laggards

Competitor Few Growing Stable No. declining

ObjectivesProduct

awarenessMax Market

Share Max. ProfitReduce

Expenditure

Pricing “Sell Value, Not Price”

Price Setting

1- Selecting the Pricing Objectives or Strategies

Survival Prices cover variable costs & some fixed costs for the company to stay in business

Overcapacity – intense competition – changing consumer wants

Max. Current Profit Price that will maximize current profit. Estimate the demand & cost function

Aim is short run cash flows & ROI

Price that maximizes sales revenue Revenue max. will lead to higher profits & market share growthMax. Market Share

& Max. Sales Growth Lowest price (Market Penetration

Pricing)Higher sales volume will lead to lower unit costs & higher long run profits

Market Skimming With each innovation skim the MarketHighest price (Market skimming Pricing)

Product quality leader Aim to be the product quality leaderPrime product (Premium quality/premium price)

Pricing

Promotion: Communications

Marketing Communication Mix

Advertising: Paid form of presentation and promotion of ideas, goods, services by sponsor

Sales Promotion: Variety of short-term incentives to encourage trial or purchase

Public Relations: Programs to promote or protect company’s image or its products

Personal Selling: Face-to-face interaction with purchasers

Advertising Sales Promotion PR Personal Selling Direct Marketing Print ads Contest, games Press release Sales Presentation Catalogs Broadcast ads Lotteries Speeches Sales Meetings Telemarketing Billboards Gifts Seminars Incentives Email Display sign Sampling Sponsorship Trade Shows Tel Packaging-outer Trade-in Charities Fax Packaging-insert Rebate Events Mailings Motion Pictures Coupons Co. Magazine E-shopping Brochures Low-interest-finance Lobbying Point-of-purchase-display

Communications Mix

Direct Marketing: Use of direct channels as tel., email…etc to communicate with customers

1-Market Penetration Strategy

3-Product development Strategy

2-Market Development Strategy

Diversification Strategy

Current Markets

New Markets

Current Products New Products

Ansoff’s G

rid Marketing Growth Strategy

• What is Marketing? • Strategic Marketing

– Segmentation – Targeting – Positioning

• Tactical Marketing (4Ps) – Product – Price – Place – Promotion

• Marketing Strategy

Summary